The Principle of Full Compensation in Tort Law

According to the principle of full compensation, tort law seeks to put the victim in the position he was in before the tort. This position is generally considered to be the situation where the victim does not suffer any harm at all. We consider an alternative interpretation. If an injurer takes due care, the victim is faced with expected harm. This can be considered the victim's expected harm in the situation he was in before the tort. Thus conceived full compensation requires a negligent injurer to pay damages which bring the (potential) victim ex ante in the same position as the victim was in the case where the (potential) injurer takes due care. We investigate the consequences of this restated negligence rule. For due care levels larger than efficient care, the standard negligent rule may lead to excessive care, whereas the restated negligent rule always leads to efficient care. Furthermore, the activity level under the restated negligent rule is greater than the activity level under the standard negligent rule, which itself is greater than the efficient activity level. Social welfare under the restated negligence rule can either be higher or lower than social welfare under the standard negligence rule.     

How policy variables influence the timing of applications for Social Security Disability Insurance

This article analyzes the impact of policy variables--employer accommodations, state Social Security Disability Insurance (DI) allowance rates, and DI benefits--on the timing of an application for DI benefits by workers with a work-limiting health condition starting when their health condition first begins to bother them. The analysis uses a rich mixture of personal and employer characteristics from the Health and Retirement Study linked to Social Security administrative records. We find that most workers do not apply immediately for DI benefits when they are first bothered by a health condition. On the contrary, the median working-age man with a work-limiting condition waits 7 years after that time before applying, and the median working-age woman waits 8 years. Although the risk of applying for benefits is greatest in the year following onset, only 16 percent of men and 13 percent of women in our sample apply within the first year, and the risk of application falls thereafter. That finding suggests that institutional factors, in addition to health factors, may play a role in the timing of DI applications. Using kernel density estimates of the distribution of application and nonapplication ordered by state allowance rates (the rate of acceptance per DI determination in each state), we find that both men and women who live in states with high allowance rates are disproportionately more likely to apply for benefits in the first year after their condition begins to bother them than are those in states with low allowance rates. Using life-table analysis, we also find that men and women who are accommodated by their employers are significantly less likely to apply for DI benefits in each of the first few years after their condition begins to bother them than are those who are not accommodated. On the basis of this evidence, we include these policy variables in a model of the timing of DI application that controls for other socioeconomic variables as well as health. Using a hazard model, we find that workers who live in states with higher allowance rates apply for DI benefits significantly sooner than those living in states with lower allowance rates following the onset of a work-limiting health condition. Workers who are accommodated following the onset of a work-limiting health condition, however, are significantly slower to apply for DI benefits. Using the mean values of all explanatory variables, we estimate the relative importance of changes in these policy variables on the speed with which workers apply for benefits after onset. We find that the mean time until application for men is 10.22 years. Universal accommodations following onset would delay application by 4.36 years. In contrast, a 20 percent decrease in state allowance rates would delay application by only 0.88 years. For working-age women, the average expected time until application once a condition begins to bother them is 10.58 years. Universal accommodations would delay that by 3.76 years, and a 20 percent decrease in allowance rates would delay it by 1.47 years. A complication in this analysis is that the policy variables are to some degree endogenous. Accommodation is probably offered more often to workers who want to continue working. Allowance rates are chosen by states on the basis of federal policy and local choices and probably in part on the health condition of workers in the state. Therefore, our estimates are upper bounds of these policy effects. Still, we believe we provide evidence that the social environment faced by workers with work-limiting health conditions can significantly influence their decision to apply for DI benefits, holding their specific health conditions constant.     

Getting Out of Debt: Garnishment of Wage in Whose Interest?

Garnishment of wage as a way for creditors to enforce payment by unwilling or insolvent debtors, while very common in Germany and Switzerland, is not very successful. Based on a dynamic model of debtor behaviour, this paper explores two alternatives of reform. One is to reduce the rate of garnishment, which at present amounts to 100 percent of the wage income exceeding a defined subsistence level, thus probably destroying incentives to work. According to model simulations, reducing the rate of garnishment is likely to result in an increase of labour supply but a decrease of garnishment revenue per period. Second, the introduction of a debt release as it exists in the United States would have an ambiguous effect on labour supply. While providing debtors with a fresh start, it would result a partial loss for creditors. A Pareto improvement thus does not seem to be possible. When taxpayers as an involved third party are taken into account, however, a potential Pareto improvement appears attainable through debt release.     

From Corporatism to Lobbyism? — Parliaments,Executives, and Organized Interests in Denmark and Norway

The integration of organized interests into the formation and implementation of public policies is a core institutional trait of the Scandinavian countries. However, significant changes have taken place in the relations between organized interests and public authorities in Denmark and Norway during the last two decades. The use of traditional corporatist structures of interest intermediation has been reduced in favor of a corresponding increase in lobbyism. At the same time a marked increase in the frequency and intensity of contacts between organized interests and parliamentary actors has taken place. The shift in focus mirrors the increasing role played by the two parliaments in public policy formation and a less positive assessment of the outcomes of strongly institutionalized corporatist policy making by administrative decision makers.     

Competition and Contracting in the Transition from CCT to Best Value: Towards a More Reflexive Regulation?

Following publication of the government’s proposals for a statutory framework of Best Value, and the introduction of regulations increasing the flexibility of CCT pending its abolition, this paper examines the relationship between the compulsory regime and its likely successor. First, the paper suggests that the Best Value frame-work is likely to impose a range of regulatory, monitoring and enforcement constraints similar in effect to the formal requirements that operate under CCT. Continuity with Conservative policy will be reinforced practically through transitional arrangements for the gradual abolition of CCT and the phased introduction of its replacement. Second, the paper argues that contracting is likely to continue to have a significant role under the new regime as the natural adjunct to the voluntary competitive processes that will be the preferred management tools for securing improvements in service performance. Open tendering and public-private sector partnership arrangements, both of which imply contractual governance, are given explicit priority in the consultation document over benchmarking, performance indicators and other comparative public management mechanisms. Third, the paper argues that local authorities are likely to want to retain and develop contracting arrangements that potentially permit a degree of control over service provision that might not be available were more radical service-providing alternatives to be adopted, involving the complete transfer of functions outside the public sector and/or their vesting in independent companies. Finally, the paper assesses the transition from CCT to Best Value from the theoretical perspective of responsive and reflexive regulation. Following a brief account of the reflexive failures of CCT, the paper argues that, although the Best Value framework is characterized by inherently reflexive processes involving self-review, consultation and standard-setting, its relative success is likely to depend ultimately both on the tightness with which legislation is drafted and on the manner of its practical interpretation, implementation and enforcement.